Call for crackdown on confusing banking information
The Customer Owned Banking Association today called for a crackdown on misleading and confusing banking information given to consumers.
COBA’s submission to the Competition Policy Review recommends changes to promote a stronger, fairer banking system.
“In a genuinely competitive market with real choice, consumers need to be able to easily understand the true identity and regulatory status of the entity they’re dealing with,” COBA CEO Louise Petschler said.
“This does not always apply in the financial services market because major banks hide behind sub-brands that look like regional banks or non-banks, ‘shadow banks’ pose as regulated banking institutions, and brokers may not be on the customer’s side.
“This should be a serious concern for competition and banking regulators. Consumers need real choice through clearer and more effective disclosure.”
COBA today pointed to ASIC’s approach to major bank multi-branding, arguing a tougher stance is needed. Currently ASIC, rather than the ACCC, is responsible for ensuring that consumers are confident and informed in financial services.
“The ACCC’s approach to a similar problem outside financial services appears to be more robust than the approach taken by ASIC.
“The ACCC is cracking down on big companies that portray themselves as small businesses because this practice misleads consumers and is anti-competitive.
“However, ASIC appears complacent about addressing major bank sub-brands, such as Bank of Melbourne and Aussie Home Loans, and has not launched a campaign against the practice in banking,” Ms Petschler said.
COBA’s recommendations to the Competition Policy Review are:
- empower consumers to exercise real choice through strong and effective disclosure regimes;
- remove structural impediments to competition, such as the implicit taxpayer subsidy enjoyed by the major banks;
- provide a competitively neutral framework to accommodate different business models;
- increase vigilance about risks posed by large, vertically integrated players; and
- increase the emphasis on promoting competition in the objectives of regulators such as APRA and ASIC.
To find out more about COBA’ submission and campaign for a stronger, fairer banking system, visit www.balancebanking.com.au.